Norway’s Election and the Difficulties of Differentiated Integration

by Benjamin Martill—15 September 2017

Britain’s relationship with the EU has been the subject of much debate since the country decided to Brexit, but the relationships between the EU and other non-member states are just as fraught. Responding to a paper by Kevin Featherstone, Dahrendorf Forum Postdoctoral Fellow Benjamin Martill argues that the recent Norwegian election has brought into focus the problems with these relationships for all parties involved.

Norway’s recent general election, held 11 September 2017, has once again focused attention on the country’s idiosyncratic relationship with the European Union (EU), and the promises and pitfalls of the ‘Norway model’ of European Economic Area (EEA) membership. National values, including the country’s relationship with the EU, played a central role in the elections, which ultimately saw the Conservative coalition remain in power. While the Norway model has featured prominently in Britain’s ongoing debate over whether, when, and how to leave the EU, some Norwegians now view Britain as a model for how to permanently sever ties with the multinational body. In a testament to its Janus-faced nature and the complex balance of costs and benefits accompanying association with the EU, the Norwegian experience has been touted by Britain’s ‘leavers’ and ‘remainers’ respectively at different points in the negotiation.

The recent debates over the Norway model carry implications beyond the country’s domestic politics and Britain’s impending exit from the EU. It represents a broader problem of how the EU conducts its relations with non-member states, where an array of different, bespoke governance arrangements – including the Norwegian and Swiss models – have evolved over the years. These differentiated relationships are now proving problematic, not only because they breed confusion over the conditions of market access, but also because their failure to reconcile market efficiency and democratic autonomy creates domestic political problems. Thus, while the Norway model is held out as one potential model for Britain’s future relationship with the EU, it is simultaneously representative of the core problem of managing differentiated relationships that has arisen at the EU level. Insofar as Brexit increases the popularity of the Norway model, or establishes new forms of differentiation, it risks contributing to a problem already acknowledged in Europe.

The Norway ‘model’

Norway is not a member of the EU, but it is a member of the EEA, an arrangement established in 1994 to allow non-EU member states to participate in the European single market. Norway acceded to the EEA on the basis of its membership of the European Free Trade Association (EFTA), a one-time competitor of the European Economic Community (EEC) founded by the UK and a number of (mainly Scandinavian) states in 1960, with the aim of promoting economic union without the level of political centralisation that characterised the EEC. Whilst most members of the EFTA – including the UK – subsequently joined the EEC, when Norway’s membership agreement was put to a national referendum in September 1972 it was rejected by 53.5 percent of voters. Since the vote split the population within parties as well as between them, the subject of EU membership became something of an official taboo in Oslo, with so-called ‘suicide clauses’ in coalition agreements foreclosing discussion of Norway’s non-membership of the EU, under pain of governmental collapse. The choice has only come before Norwegian voters once in the intervening decades, in 1994, and the result was largely the same as in 1972, with 52.2 percent opposed to EU membership.

The establishment of the EEA in 1994 appeared to offer a workable politico-economic solution for both Norway and the EU, since it allowed Norway access to the European single market without the need to accede to the EU, an option precluded at any rate by the two negative referendum results. Norway’s access to the single market comes at the price of its adopting the acquis of established EU legislation and committing to implementing future EU legislation, much of which is concerned with the functioning of the internal market. But as a non-EU member, Norway has no (formal) role in the process of formulating EU legislation. Norway has, as a result, become a subject of the EU, rather than a participating agent, and this is reflected in growing dissatisfaction with the EU at the national level. Public support for the EU in Norway has dwindled to 16 percent, according to the most recent polling (Ipsos Mori, June 2016). Moreover, the data suggest that half of Norwegian citizens would like to have a referendum on Norway’s membership or the EEA (Dagsavisen, 2 May 2017). The Conservatives are the only political party formally committed to full EU membership, although since they claimed a narrow victory in the recent election the likelihood of Eurosceptic ideas penetrating the government has decreased somewhat (The Guardian, 11 September 2017).

The perils of association

Growing opposition to the EU and the EEA in Norway is a symptom of a more general problem within the EU of managing differentiation between members and non-members. These bespoke relationships, whilst seemingly representing laudable flexibility on the EU’s behalf when they were made, have subsequently contributed to a number of tensions between market access and democracy, each of which are evident in the Norwegian example:

First, the purported independence of Norway is, in practice, extremely limited. The EEA Joint Committee is charged with determining whether EU rules should apply to EEA countries, but in reality it rubber-stamps almost all EU legislation, meaning that, in effect, there is little difference in the legislative requirements of EU and EEA membership (Gaenzle and Henoekl, 2018: 81). This is a familiar tension, since the efficient operation of markets requires rule-based arrangements, and since permitting individual derogations may offer a licence to protect key national industries. But it does mean the purported independence and autonomy offered by EEA membership – as opposed to EU membership – is largely illusory.

Second, there is a democratic deficit inherent in Norway’s absence from the key institutions of the EU policy-making process. Norway cannot contribute (formally) to the design of legislation it will be subject to, since, as a non-member state, it does not nominate a Commissioner. Nor can Norway vote on whether to adopt individual legislation, since it does not have a vote in the Council, or any MEPs in the Parliament. Whilst talk of a ‘democratic deficit’ in the EU is commonplace, largely because control of the EU’s legislative agenda is not subject to popular contestation or direct election, the deficit in Norway’s case is particularly acute, since it lacks even indirectly elected channels.

Third, there is the challenge of regulatory accountability, since national regulatory agencies are increasingly drawn to engage with their European counterparts – notably the new European Supervisory Authorities in banking, insurance and pensions, and securities – thereby circumventing domestic authorities and EEA oversight mechanisms, such as the Joint Parliamentary Committee. In by-passing domestic governance and regulatory institutions, these relationships – though necessary for full participation in the single market by Norwegian firms and regulators – undermine domestically legitimated accountability structures and processes.

Thus, whilst ‘opt-outs’ and ‘two-speed’ solutions proved helpful in breaking the deadlock on integration in the mid-1990s and early 2000s, the resulting patchwork of governing arrangements sits uneasily with the standardisation of rules and regulations required for the smooth operation of the internal market. Indeed, the Swiss experience has proven similarly problematic, since Switzerland never joined the EEA, relying instead on taking the ‘autonomous’ decision to implement each piece of required EU legislation on a case-by-case basis, and precipitated a show-down with the EU over the attempted adoption of migration quotas in 2014. The hollowness of Swiss claims to adopt legislation independently, coupled with its eventual backtracking on quotas in December 2016, highlight the absence of meaningful autonomy enshrined within these arrangements.

Conclusion

The Norway model came to prominence in the UK during the referendum campaign and its aftermath. Although support for Norwegian-style association has come and gone among leavers and remainers in accordance with the changing realities in UK politics, there is still a sizeable constituency in the UK – among leavers and remainers – who would regard the model as an appropriate basis for the UK’s future relations with the EU. And yet, as Norway’s recent election campaign has highlighted, the country’s relationship with the EU is not unproblematic. Differentiation at the politico-legal level sits uneasily with the dictates of ensuring the smooth operation of the internal market, and this creates serious problems for democracy, autonomy and accountability in Norwegian politics.

The problems of association are worth acknowledging for all sides. Norway’s politicians will need to continue to weigh up the trade-off between market access on the one-hand and independence and democratic accountability on the other. Norway’s government may need to break the taboo over the question of Norway’s EU membership and engage with the substance of anti-EU and anti-EEA opinion before Eurosceptics force the agenda. For the UK, it is important that the realities of the Norway model are understood by all. Only then can a national conversation be had about the appropriateness of such a model for the UK’s future relations with the EU. Whilst the Norway model does indeed offer greater market access, it does not succeed at reconciling market access and democratic control as neatly as its supporters assume. Moreover, whilst the UK seeks alternatives to membership, it would do well to acknowledge that it does so at a time when the Union’s once-flexible approach to market access is being severely tested by concerns about its complexity and legitimacy.

The EU, for its part, may wish to reflect upon the negative consequences of the differentiation in governance arrangements. With populism on the march across Europe, and with ever greater concern about the democratic deficit, the trade-off between market access and democracy cannot be ignored. What is needed is the establishment of a clear, rules-based system defining different forms of membership. Brexit offers an additional challenge in this respect, but also an important opportunity, as it forces the EU to re-think the boundary between membership and non-membership and to reflect on the future sustainability of the Union. Insofar as the UK wishes to follow the Norway model, or devise its own bespoke relationship with the EU, it throws into sharp relief the problems and complexities the EU faces in managing distinct sets of differentiated relationships with non-members.

The opinions expressed in this blog contribution are entirely those of the author and do not represent the positions of the Dahrendorf Forum or its hosts Hertie School of Governance and London School of Economics and Political Science or its funder Stiftung Mercator.

Events

About

The Dahrendorf Forum is a major research and policy-engagement network that brings together academics and practitioners to critically engage with the challenges facing Europe. The current research cycle interrogates relationships between EU and non-EU countries, the implications of Brexit, the migration crisis and populist movements.